emerging markets to frontier markets

Cabot Investors Conference 2013 www.cabot.net

Emerging Markets toFrontier Markets

Paul GoodwinAnalyst,

Cabot China & Emerging Markets Reportpaul@cabot.net

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Danger Everywhere You Look

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What Are the Dangers?

• Examples:–Greek liquidity crisis–Egyptian revolution–China’s investor controls– Inflation in Brazil–Bureaucracy in India

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The Risks: China Mobile (CHL)

2004-2007

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The Risks: China Mobile (CHL)

2007-Present

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Emerging Markets Leave China

in the Dust: Jan. 2011–Apr. 2013

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Then It All Changes in May

• PGJ = China• EEM = Emerging Markets

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EM Investing Is a Stock-Picker’s Game

• Phoenix New Media (FENG)– Inc. 2007 in Beijing– Internet, mobile and TV–Market cap: $625 million–Revenue: $184 million–Announced Q2 results Monday:

stock up 12%

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• Revenue sources (Q1 2013)–Value added services = 79% of

revenue•Social Networks—24%•Online Games—55%

–Advertising = 6%–eCommerce = 14%

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• Q1 Earnings Report: May 15–Total revenue up 40.4% y.o.y.–Operating profit up 37.1%

• Q2 Earnings Report: August 14–???

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• Established 1999– Largest eCommerce player in

China–Market cap HKD67 billion ($8.7

billion)–17% owned by Yahoo!– IPO talked about end of 2013

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• Alibaba.com—Global e-commerce• 1688.com—E-commerce for small Chinese

biz• AliExpress—Global consumer marketplace• Taobao.com—C2C shopping destination• Tmall.com—Online brand-name shopping• eTao—Comprehensive shopping search

engine• Alibaba Cloud Computing—Just like Amazon• Alipay—Just like Paypal

Cabot Investors Conference 2013 www.cabot.net

Cabot Investors Conference 2013 www.cabot.net